A recent survey showed that companies in the Middle East remain reluctant to fully implement sufficient risk management policies despite the negative effects the global economic crisis had on corporate companies that did not have proper risk strategies in place.
A comparative survey of UK and Middle Eastern companies conducted by UAE-based Collaboration, Management and Control Solutions (CMCS) revealed that 59 per cent of Middle Eastern respondents have a risk management policy in place, as opposed to 73.5 per cent in the UK.
Of those Middle Eastern organisations that do have policies, 59 per cent fully implement the policy and adhere to pre-defined procedures for risk management, compared to 73.4 per cent in the UK. Risk management studies are of great value to the region, where project and investment failures commonly trace back to poor risk management strategies.
Figures from the survey suggest that Middle East companies are holding back on investing in risk management procedure. The results highlight the need for improvements in the region's risk management attitudes and practices.
"Although the survey indicates an upward trend in risk management adoption in the Middle East, it also shows more room for improvement in terms of policies and practices. Project-based companies are especially encouraged to enforce better risk management frameworks in light of the volatility of their markets," said Bassam Samman, CEO and Founder, CMCS.
The CMCS study, which focused mainly on project-based construction firms, analysed the degrees of adoption of formal risk management policies and procedures and the importance given to risk management as a tool for business success.
Some of the key findings from the Middle East were that 45 per cent of firms with formal risk management policies have a dedicated Risk Management Officer to handle the risk management process, compared to 51 per cent in the UK. While, 61 per cent of Middle East companies assess each risk against the probability of occurrence and impact, in the UK it is 79.2 per cent.
Results also showed that, among Middle Eastern firms with risk management provisions, only 53 per cent develop a complete risk management plan for each project, compared to 69.3 per cent in the UK.
